Fairfax Media confirmed today that it has completed the sale of its stake in New Zealand online auction house Trade Me for $616 million, and dipped straight back into the sector with the acquisition of tech investment firm, Netus, for an undisclosed sum.

Fairfax, which publishes the Sydney Morning Herald and The Age, paid $NZ700 million for the entire Trade Me business in 2006.

Fairfax Media chief executive Greg Hywood said on Tuesday that the sale’s proceeds would "provide us with a very strong balance sheet and the financial flexibility to invest and complete the company’s structural transformation".

The sale cuts Fairfax’s net debt below $200 million.

While the Trade Me sale was supported by some of Fairfax’s major institutional shareholders, it also deprives the company of a key source of digital earnings.

The Netus acquisition - which is understood to be in the tens of millions of dollars - is designed to address this.

Netus founder, Daniel Petre, said the company will be charged with finding ‘‘investments that can benefit from the traffic Fairfax can point at new businesses’’.

He said Netus will be looking for opportunities that ‘‘have the potential to move the dial in a reasonably short period’’ which he identified as three years.

Earlier this week, Mr Hywood said the company is looking for small scale digital acquisitions.

Netus will also focus on helping Fairfax’s current digital business achieve better results.

‘‘We think there is some scope here as well,’’ Mr Petre said.

Netus claims success with previous investments like ReachLocal and Travel.com, with an average internal rate of return (IRR) across its investment portfolio of 50 per cent.

Netus currently owns a 27 per cent stake in online video ads business, The Video Network, and 85 per cent of digital publisher Allure Media. Fairfax announced on Friday that it has acquired the other 15 per cent of Allure.

Mr Petre and Netus chief Alison Deans, both worked with the Kerry Packer-backed tech investment firm ecorp and helped develop eBay’s local operations which Ms Deans headed.

Mr Petre set-up Netus in 2005 with a $40 million investment from Fairfax rival, Rupert Murdoch-owned News Ltd.

News sold its half share of Netus in May this year for $22.3 million, saying the company wanted to focus its resources on ‘‘larger opportunities than those within the scope of Netus.’’

This year, Fairfax announced plans to cut more than 1900 staff and take about $235 million in structural costs out of the business. This includes plans to close its largest print plants in Sydney and Melbourne, turning the Herald and The Age into compacts, and introducing a metered model to charge digital subscribers for access to these mastheads.

At the shareholder meeting, Fairfax chairman Roger Corbett said a break-up, or demerger, of the core media business was ruled out after detailed analysis as it would not add to shareholder value, and would undermine future value creation.